Liquor Shop Allotment Dispute: Supreme Court Quashes High Court’s Interim Order
The case of Suresh Chandra vs. Joga Singh Bisht & Ors. revolves around the allotment of a foreign liquor shop in Pithoragarh, Uttarakhand. The Supreme Court was tasked with determining whether the High Court had erred in staying the operation of the shop’s allotment, which had been granted to the appellant, Suresh Chandra.
Background of the Case
The dispute began when the license for a foreign liquor shop was initially allotted to Balkar Singh on 23.03.2020. However, the shop remained non-operational from 06.05.2020, leading the authorities to direct Balkar Singh to resume operations. Instead, he submitted an application on 12.05.2020 seeking cancellation of his allotment.
The authorities canceled the license under Section 34 of the Excise Act and initiated a resettlement process for the liquor shop. An advertisement was issued on 02.06.2020, inviting applications for a new allottee. Since no bids were received, another advertisement was published on 06.06.2020. Suresh Chandra, the appellant, participated and emerged as the highest bidder with a bid of Rs.3,46,78,112/-. The authorities accepted his bid and granted him the license on 09.06.2020.
Legal Challenge
Following the allotment, Joga Singh Bisht, the first respondent, filed a writ petition in the Uttarakhand High Court, arguing that the shop had been allotted for a lower amount, causing a revenue loss to the state. He contended that the revenue expectation was Rs.7,70,62,471/- and that the allotment to the appellant at Rs.3.46 crore resulted in a loss of Rs.5 crore.
The single judge of the High Court dismissed the petition, ruling that the respondent had no locus standi as he had not participated in the resettlement process. However, the Division Bench granted an interim stay on the operation of the liquor shop on 21.08.2020, reasoning that the matter involved public interest due to alleged revenue loss.
Arguments of the Parties
Appellant’s (Suresh Chandra) Arguments
- The High Court erred in granting an interim stay based on an alleged revenue loss without considering that the state was recovering the shortfall from the previous allottee, Balkar Singh.
- The first respondent had not participated in the resettlement process, and therefore, he had no standing to challenge the allotment.
- He had legally acquired the license and deposited the required amount as per the resettlement conditions.
- The High Court’s intervention disrupted his business operations despite compliance with all legal requirements.
Respondent’s (Joga Singh Bisht) Arguments
- The government suffered a revenue loss of Rs.5 crore due to the reduced allotment price.
- As a concerned citizen, he had the right to file a petition on public interest grounds.
- The authorities should have invited fresh bids rather than awarding the shop for a lower amount.
Supreme Court’s Analysis and Judgment
1. Locus Standi of the Respondent
The Supreme Court agreed with the single judge that the respondent had no locus standi to challenge the allotment since he had not participated in the resettlement process. The Court stated:
“The Division Bench erred in staying the operation of the resettlement in favor of the appellant, even after compliance with the conditions of the license.”
2. No Revenue Loss to the Government
The Supreme Court emphasized that the alleged revenue loss was incorrect because the state had issued a recovery certificate of Rs.4,08,70,998/- against Balkar Singh. It noted:
“There is no loss to the government, as the shortfall is being recovered from the previous allottee.”
3. No Malafide Action by the Government
The Court observed that there were no allegations of favoritism, nepotism, or malafide action in the resettlement process. It held:
“If such petitions are encouraged, there will be no finality to any license or permission granted by the government.”
4. Interference with a Valid License
The Supreme Court criticized the High Court for staying the license despite the appellant’s compliance with the terms of the allotment. It ruled:
“The appellant was prevented from continuing his business despite paying Rs.3 lakh per day to the department.”
Final Verdict
The Supreme Court set aside the High Court’s orders dated 21.08.2020 and 08.09.2020. It directed that:
- The appellant (Suresh Chandra) shall be allowed to continue operating the liquor shop immediately.
- The respondent (Joga Singh Bisht) must pay a penalty of Rs.1,00,000/- to the appellant within four weeks for filing a frivolous petition.
- The state authorities may take action if the appellant fails to comply with resettlement conditions.
Key Takeaways
- Public interest petitions must demonstrate genuine concerns and not be used to disrupt legally valid government decisions.
- Individuals who do not participate in an allotment process cannot later challenge it on the ground of unfairness.
- The Supreme Court discourages unnecessary interference in business operations when no malafide action is proven.
- Government revenue concerns should be addressed through appropriate recovery mechanisms rather than by disrupting business operations.
This ruling underscores the need for judicial restraint in commercial matters and ensures that government contracts remain stable unless clear violations occur.
Petitioner Name: Suresh Chandra.Respondent Name: Joga Singh Bisht & Ors..Judgment By: Justice L. Nageswara Rao, Justice Hemant Gupta, Justice Ajay Rastogi.Place Of Incident: Pithoragarh, Uttarakhand.Judgment Date: 26-10-2020.
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